Plaintiff's Action to Collect Ex-Spouse’s Retirement Pension Not Time Barred

The state's statute of repose, which bars actions upon judgments not commenced within 20 years after the judgment is entered, did not bar a plaintiff's action to collect an interest in her ex-husbands retirement pension, even though the divorce and marital property judgment was entered more than 20 years before she filed the action.

May 22, 2013 – Acknowledging the case “raises thorny questions,” a Wisconsin Supreme Court majority recently ruled that Wisconsin’s statute of repose did not bar a plaintiff’s action to collect a half-interest in her ex-spouse’s retirement pension.

Wis. Stat. section 893.40, the repose statute, bars actions upon judgments or decrees that are not commenced within 20 years after the judgment or decree is entered.

More than 20 years after a court entered judgment of divorce between Patricia Johnson and Michael Masters, which included a marital property settlement agreement, Johnson sought her interest in Masters’ retirement pension under the property agreement.

To secure her interest in the pension, the 1989 divorce and property judgment required Johnson to submit a qualified domestic relations order (QDRO) with the Wisconsin Retirement System (WRS), which administered Masters’s public pension.

At the time of judgment, the WRS was not authorized to accept such orders, because Wisconsin law prohibited the assignment of pension interests.

The Wisconsin Legislature authorized WRS to accept QDROs in 1998. Thus, Johnson argued that section 893.40 was triggered in 1998, and the statute of repose did not bar her action until 2018. A circuit court ruled against Johnson. But on certification from the court of appeals, a Wisconsin Supreme Court majority (7-1) reversed.

In Johnson v. Masters, 2013 WI 43 (May 17, 2013), the majority ruled that Johnson’s action was not barred because she could not submit the QDRO until 1998, and it would be “absurd and unreasonable” to construe the statute as triggered before then.

“Under the circumstances present in this case where a statute precludes a provision in a judgment, the statute of repose cannot begin to run as to that provision until the legislature changes the law such that the provision can be carried out,” wrote Justice Patrick Crooks. Five other justices accepted this ultimate conclusion.

Justice David Prosser was the lone dissenter. “The issue presented in this case is whether there is any reasonable basis for Johnson to avoid the apparent effect of [Wis. Stat. § 893.40]. I conclude that there is not,” Justice Prosser wrote.

Concurrences

Justice Annette Ziegler – joined by Justices Patience Roggensack and Michael Gableman – agreed that section 893.40 was not triggered in 1989 when the divorce decree and property judgment was entered. She also joined the majority, “because it does not conclude that a court has the equitable power to ignore a statute of repose.” But she called for more clarity.

“I concur to urge the legislature to consider whether legislative change could provide greater certainty to courts, litigants, and parties who may depend on the enforceability of certain family court matters beyond 20 years,” she wrote.

Ziegler said the majority opinion “leaves unanswered the question of whether or how Wis. Stat. § 893.40 may affect the enforcement of obligations which may necessarily extend beyond 20 years.”

Citing Prosser’s dissent, Bradley said judgments ordering indefinite maintenance are not barred by the statute of repose, and obligations to designate life insurance beneficiaries can be enforced beyond the 20-year period.

“By raising questions concerning the continued vitality of judgments that require the payment of maintenance or the continuation of life insurance with designated beneficiaries, Justice Ziegler’s concurrence creates uncertainty in areas of family law not presented in this case,” wrote Justice Bradley.

The chief justice also questioned Ziegler’s comments regarding a circuit court’s equitable power to enforce judgments despite a statute of repose.

The majority did not decide Johnson’s case on equitable grounds, but noted that equitable estoppel could serve as an independent ground for ruling in Johnson’s favor.

Justice Ziegler suggested that circuit courts can’t use equitable powers to supersede the limits of a statute of repose, because the determination would be subjective.

“The comment in Justice Ziegler’s concurrence equating discretion with judicial subjectivity and arbitrariness does a disservice to judicial decision making and to the circuit courts of the state," Chief Justice Abrahamson wrote. "The comment cannot stand unchallenged.”

In a footnote, Justice Ziegler responded, noting that she formerly served as a circuit court judge: “I am at a loss as to why Chief Justice Abrahamson’s concurrence disparages my concern over avoiding arbitrary decision-making, which should not be confused with a court’s duty to engage in discretionary decision-making, as somehow being disrespectful of circuit court judges,” Ziegler wrote.